Commercial

Tax

Network

Professional Credentials & Information

Your Property Tax Reduction Specialists!

Commercial Tax Network

- PROPERTY TAX MANAGERS AND CONSULTANTS

Commercial Tax Network (CTN) is a Houston-based consulting firm that represents corporate clients in property tax matters across the nation. As a property owner, a high percentage of your company's gross revenue goes to pay ad valorem taxes, and a significant amount of your company's time is spent examining these costs. Our goal is to manage and reduce your company’s property tax expenditures so that you save money and valuable time. Working independently or as an extension of your tax department, we combine the advantage of an extensive market database with our tax consultants and appraisers who are experienced in minimizing property tax liabilities.

In this highly specialized ad valorem tax field, there is no substitute for experienced and qualified consultants who meet face to face with representatives of the taxing authorities. Our staff possesses over 100 years of combined experience in property tax consulting and isskilled in representing various types of properties that include industrial facilities, apartment complexes, hotels, motels, office buildings, shopping centers and raw land. Also, our consultants are experts in bothindustrial and commercialbusiness personal property. The combined value of properties represented by CTN exceeds one billion dollars.

We employ professional integrity in decision-making and design individual solutions to meet your specific needs.Property taxes are governed by the respective state’s Property tax code (a very complex document which defines how the respective appraisal districts arrive at their values). The tax code is always undergoing changes and modifications that need to be continually monitored. Our staff is on the cutting edge of these changes and we utilize them to achieve the best results possible.


Purpose

The purpose of Commercial Tax Network is to design and implement a superior ad valorem tax program for your company, granting savings in the taxes you pay on real estate and/or personal property. To accomplish this purpose, CTN takes action in the following ways:

We provide well trained, qualified tax specialists to work directly on your behalf and with your personnel.

We prepare a complete analysis of your tax requirements, evaluate it for legitimate assessments and curtail excessive obligations imposed by taxing authorities.

We provide personal negotiation of your property tax value assessments with local authorities.

We assist in the continuing administration of your ad valorem tax program.

Benefits

The benefits sought by Commercial Tax Network in preparing your tax program may be summarized as follows:

  • CTN helps your company maintain good community relations while defending your rights as a taxpayer.
  • By choosingCTN to work on reducing your tax obligations, it frees your staff to concentrate on important internal business matters.
  • CTNdetermines the lowest appropriate evaluation for your taxable property, insuring you pay only your fair share of taxes.
  • In minimizing your ad valorem tax liability, your company can experience significant and expanded profitability.
  • With CTN directing your property tax program, your company will notice increased productivity, more focus on your business and a greater profit margin.

Methodology

To create a responsive, economical tax program for your company, Commercial Tax Network will select and pursue a course from the following steps:

  • Conduct personal, on-site inspection of your physical facilities.
  • Determine from public records the appraisal method and data employed by the local taxing authority inassessing your property.
  • Analyze your company’s financial and appraisal records to discover possible multiple assessments.
  • Examine appraisal methods ensuring you are receiving maximum depreciation advantages.
  • Determine assessments on comparable properties for application of equal and fair standards by taxing authorities.
  • Create appeal summaries for presentation to assessing authorities based on reasonable calculation of market, cost and income basis for values, and comparable assessments.
  • Inspect properties for economic and physical obsolescence.
  • Examine inventory values for maximum allowable credits.
  • Prepare, sign and file personal property and/or real estate tax returns on your behalf.
  • Conduct active, personal negotiation of values with local tax assessing authorities.
  • Appeal unfair valuations and make personal presentations of data to Review Boards.
  • Recommend legal counsel to appeal unfair evaluations when warranted.
  • Secure proper tax statements, audit according to the approved program and authorize for payment.
  • Analyze and report major changes in tax liabilities of individual properties.
  • Assist you in estimating taxes on proposed new properties upon request.
  • Provide estimates of all taxes for accrual purposes.
  • Prepare annual reports comparing the current year's tax assessments with prior years, documenting your tax savings and projecting recommendations for future years.

Services Available

Commercial Tax Network performs these services for our clients:

  • Real Estate Assessment Appeals
  • Informal Property Tax Hearings
  • Formal Property Tax Hearings
  • Property Tax Litigation Support
  • File Freeport Exemptions
  • 1031 Exchange
  • Commercial and Residential Appraisal Reports
  • Audit property records for accuracy & fair valuation
  • Audit Asset Lists for Accuracy
  • Eliminate Double Assessments
  • Negotiate fair & equal valuation with Appraisal District
  • Tax Estimate Reports
  • Cost Segregation
  • Tax Consulting Reports
  • Homestead Exemptions
  • Determining Eligibility and Filing for Exemptions
  • Determining Eligibility and Filing for Binding Arbitration
  • Filing Property Returns/Renditions
  • Annual Reports
  • Roll-Back Assessment
  • Personal Property Representation
  • Industrial Property Representation
  • Residential Property Tax Representation
  • Assistance on Prorations for Commercial Properties
  • Check Double Assessments
  • Tax Estimates for Budgets
  • Change of Ownership with Tax Office

Partial List of Results Affected by Commercial Tax Network:

AREA: REDUCTION: TAX SAVINGS:

COMMERCIAL

FM 19601,278,180 $34,446

GREENWAY2,222,810 $60,779

MIDLAND5,600,000 $157,360

NORTH BELT2,174,000 $60,174

NORTH BOROUGH2,113,550 $58,658

SOUTHEAST 712,000 $18,013

SOUTHWEST FREEWAY 843,400 $23,061

WEST LOOP 1,911,870 $54,258

WESTCHASE1,313,580 $36,780

APARTMENTS

DALLAS1,387,630 $38,853

FLORIDA3,853,710 $107,903

FONDREN SOUTHWEST1,825,340$49,840

GREENWAY1,724,720 $48,292

NASA2,099,640$30,865

NORTH1,456,920 $40,793

SOUTHWEST1,103,890 $30,908

WEST HOUSTON1,604,000$32,630

LAND

BEECHNUT2,476,000$83,430

BELTWAY 81,466,360$38,565

BISSONNET 1,284,740$36,937

HWY 61,547,900$32,196

I-10 & BARKER CYPRESS2,548,480$47,656

NORTH1,730,530 $48,456

SAM HOUSTON PKWY1,337,980 $37,463

INDUSTRIAL

EAST, PERSONAL PROP. 2,326,820 $64,897

NORTH, PERSONAL PROP.10,434,110 $292,155

NORTH, SAM HOUSTON 1,834,810$51,374

NORTHEAST, PERSONAL PROP. 1,483,300 $41,532

CTN represents over 1400 clients; below is a partiallist of our clients:

AllrightAutoPark / Sun Development, Inc.
Associated Imports / Tarantino Properties
Atlantic Machine Tool / TomballHospital Authority
Brake Check – Peveto Companies / Vista Healthcare
Coastal Securities
Elliot Support Systems
Holiday Inn
KLBL Radio Station – SIGA Broadcasting
L & L Properties
Lochinvar Golf, Inc.
Matheson Tri-Gas, Inc.
Miyako Restaurants
Mulligans Golf Course
Newco Management
Ramada Inns
Schiller Properties
Serta Mattress Company
Summit Steel Fabricators


Apartments

In dealing with apartments we take into consideration the overall marketability of your property using several different approaches and conduct a field inspection, ensuring that your property is fairly and equally assessed.Below are a few case studies detailing how we saved apartment owners thousands of dollars in property taxes.

Apartment Case Study 1

CTN saved Newco Management Company $82,092 in Taxes for Willowick Apartment Complex in Just 2 Years

Client Profile

Newco Management Company has been a client of ours since 1996. We contacted them as a result of market research done in the area surrounding their property indicating that their property was over assessed. They allowed us to correct an excessive valuation on this property, Willowick Apartment Complex. As a result of our success, Newco entered the rest of their entire portfolio of properties into our contract, including properties in California, Florida, Georgia, Virginia, Texas, Colorado, North Carolina, and South Carolina.

Problem

This apartment complex is located near an exclusive residential area of Houston. Prior to our representation of the project, the value had always been overstated. It was split into two smaller accounts for only one project and its classification was incorrect. In addition, the average unit size is considerably larger than any other similar properties which resulted in the appraisal district overstating the effective rental rates and expenses.

Solution

First we combined the two separate accounts into one account with a total value of $8,093,600. We protested the value using the actual income, physical information concerning functional problems, and used tax comparables evaluating the subject against property classified comps. We successfully reduced the value to $6,368,880 for a tax savings of $47,653.

During the years, we have kept their values low with the exception of the 2001 tax year. We were forced to recommend litigation to receive a fair value. During the course of the lawsuit we included the 2002 tax year. The actual tax savings for those years are as follows:

2001

Noticed Preliminary Value$12,112,400

Final Value in Appeal$11,180,000Tax savings of $27,080

Lawsuit Final Value$10,175,000Tax savings of $29,774

Total Yearly Savings $56,854

2002

Noticed Preliminary Value$11,651,900

Final Value in Appeal$11,651,900Tax savings of $00,000

Lawsuit Final Value$10,800,000Tax savings of $25,238

Total Yearly Savings $25,238

Total 2 year savings $82,092

The success of the lawsuit was a combination of Actual Income calculations and Uniform and Equal calculations per the Texas Property Tax Code. According to Newco’s internal appraisal, the actual market value is significantly higher than our successful efforts arriving at the above assessed values.

Apartment Case Study 2

CTN saved Millennium Interests $44,515 in Taxes for

Alvin Cedar Grove Apartments in a Single Year

CLIENT PROFILE

Millennium Interests has been a client of CTN for more than 10 years. After our market research indicated that several of their properties was excessive, we contacted them and they agreed to allow us to attempt to correct the error in valuation. Subsequently, they asked us to represent them on additional properties. Since then, we have continued our relationship in minimizing their portfolio.

PROBLEM

The subject of this case study is an apartment complex in the city of Alvin, Brazoria County, TX. The Appraisal District previously valued the complex during the 2003 tax year at $2,091,420; they proposed a new 2004 valuation at $3,524,820. This was a significant increase over the prior year’s taxes.

SOLUTION

After analyzing their actual income and expenses and other pertinent data, CTN filed an appeal. A complete analysis of the income indicated a value of approximately $2,615,000. This took into consideration market rents, occupancy and deferred maintenance.

Our extensive analysis of comparable assessments via the unequal appraisal approach made it clear that our property was singled out for this significant increase. Our research discovered that similar properties in the immediate area with similar physical characteristics indicated a value of $2,260,000 for the subject property.

During the hearing and thru some aggressive negotiation, we agreed on a value of $2,320,450. This was a reduction of $1,204,370 in valuation for the subject property. This value reduction resulted in a Tax Savings $44,515.

Retail Centers &

Office Buildings

RetailCenters and OfficeBuildings are faced with hefty property taxes assessed on owned and leased real estate, distribution centers, inventory, store fixtures, vehicles, and corporate facilities. Retailers must, in addition, process a high volume of fixed asset and inventory renditions, landlord reimbursements, and tax bills. Dealing with this heavy burden can be overpowering. To aggressively tackle these issues, CTN offers a network of experienced tax negotiators to appeal soaring property values nationwide. CTN also offers highly efficient administrative service and technology solutions to provide innovative levels of dependability and control throughout all phases of the administrative processes.Below are a few case studies exemplifying how we have saved office building and retail owners thousands of dollars.

Office Building Case Study 1

CTN saved Cummings Baccus Interests $143,600 in Taxes for

A ClassOfficeBuilding in Midland, TXin a Single Year

Client Profile

Cummings Baccus Interests has been a client of CTN since 1998. CTN became aware of their recently acquired portfolio from one of our Senior Consultants acquaintances. It was a portfolio of Wells Fargo owned office buildings throughout Texas. They asked us for help in managing the property tax function of the entire portfolio. Since then, we have continued our relationship in minimizing their portfolio with great success.

Problem

The subject of this case study is a high-rise office building in the central business district of Midland, TX. It was purchased in April 2001 for $20,500,000. The appraisal district was aware of the purchase and reflected its sale in the 2001 increase in assessment. The Appraisal District previously valued the complex during the 2000 tax year at $11,049,710; they proposed a new 2001 valuation of $18,101,860. This was a significant increase over the prior year’s taxes.

Solution

After analyzing their actual income and expenses, occupancy, market rents and other comparable assessments, CTN filed an appeal based on the Uniform and Equal approach to value. The new proposed value for the 2001 tax year showed a 63% increase over the previous year.

The data collected in our original analysis of similar Class A office buildings in the central business district reflected relatively unchanged assessments from the prior year. This caused an unequal assessment for our subject property in conflict with the Texas Property Tax Code.

In the administrative appeal we were moderately successful by securing a reduction of $1,676,860 to $16,425,000 or a tax savings of $47,200. While this was a sizeable reduction, it still left the subject assessed significantly higher than comparable properties.

In review of the formal hearing results, CTN recommended a lawsuit to be filed against the appraisal office to compel them to correct this inequity. The property owner agreed with our analysis and requested CTN to pursue the matter to District Court.

The lawsuit was filed and CTN presented evidence to the appraisal office in support of our unequal appraisal. By agreed judgment, the value was reduced to $13,000,000. This was an additional reduction of $3,425,000 or $96,406 in tax savings.

Summary of Value reductions:

Total Preliminary Value:$18,101,860

Administrative Hearing Value: $16,425,000

Litigation Final Value:$13,000,000

Total One Year Reduction:$5,101,860 or $143,600 in Total Tax Savings

This case reflects CTN’s commitment to our clients that we will champion our clients’ interests until we are convinced that they are being treated fairly. Even though at first glance it appeared that the Preliminary Noticed value of $18,101,860 was good compared to the sales price of $20,800,000, our in-depth research uncovered the inequity that ultimately saved them $143,600.

Retail Case Study 1

CTN saved David Gibbs Interests $40,547 in Taxes for

1006 Long Point in Houston, TXin a Single Year

Client Profile

David Gibbs has been a satisfied client of CTN since 1997. He owns a number of retail shopping centers, neighborhood centers, industrial properties and office buildings. As a result of our research in the area of the above mentioned property, we discovered the value was much higher than similar properties. We contacted him concerning this issue and he agreed to allow us to correct this problem. We were successful with this property and he gave us his entire portfolio of properties, of which we continue to represent today.

Problem

This center is an older center that in prior years had a major anchor tenant allowing the ownership to secure reasonably good tenants at the going market rent. However, the economics of the area changed and the anchor tenant moved out. This had a negative effect on the remainder of the center. There was a major cinema also in a portion that a couple of years later also moved out and was replaced by a dollar cinema.

Solution

In retailvaluation, all approaches to value are analyzed. In addition to the traditional approaches (Cost, Market, and Income), the subject assessment is compared to other similar office buildings to determine the Uniform and Equal approach based on comparable properties with similar characteristics. Then the best approach for each situation is pursued. Retail properties are either income producing or owner occupied. The appropriate approaches are analyzed to determine the optimum avenue for the best reduction.

For most Retail properties, the income approach is typically used. The actual rents, expenses, CAM charges (if any) and occupancy rates are analyzed and compared to the market and appropriate cap rates are employed. After thorough inspection of the subject property for specific negative issues such as: deferred maintenance, functional problems and any other issues, all the data is assembled.

The appraisal districts records are reviewed to determine the method used to set their value and comparisons are made to our models. An appeal summary is generated from our proprietary system that contains all pertinent information to effect the lowest valuation and we proceed to the informal appeal.

If we are not satisfied with the informal results, we proceed with the formal board hearing, which is the completion of the administrative appeal process. If a favorable result is still not achieved, we will determine whether pursuing judicial remedies in district court would be feasible.